Staff not fully informed about pensions

Very few employers keep staff informed about their pension arrangements on an on-going basis, according to an annual reward survey by people management experts, the Chartered Institute of Personnel and Development. It found that the vast majority of employers (88%) tell staff about pensions during their recruitment and induction process, with only 46% updating staff about their pension arrangements on an ongoing basis.

Duncan Brown, Assistant Director-General for the CIPD commented, Employers are failing to communicate their pensions arrangements effectively after recruitment, which means that the full value of their rewards package is not appreciated, and employees donít often understand the full importance of issues such as saving enough for their retirement.

Other findings reveals that a third of employers ask staff not to talk about their pay and conditions with their co-workers, while a quarter of them ask staff not to talk about their pay and conditions with people outside work.

Charles Cotton, CIPD adviser on reward and employment conditions commented that employersí secrecy about pay could cause problems in the workplace. It could lead to ill-founded rumours flying around the office leading to dissatisfaction, falling commitment, high absence rates and low productivity. Wherever practical, we believe that employers should be open about how salary levels are determined and how pay progression is managed. That way staff understand what the organization values and is prepared to pay for and what it expects in return.

The findings will be launched at the CIPDís Annual Reward Conference on 10 February 2004.


Other key survey findings include:

*Nearly half (48%) of the employers surveyed plan to carry out pay audits in 2004, spurred on by the threat of government intervention. This compares to 28.5% of employers last year, and 20% in the previous 5 years. This shows that progress is being made to address equal pay issues through Government encouragement rather than legislative enforcement

*Just under a fifth of employers plan to raise their retirement age at their organisation over the next two years, with the proposed law on age discrimination being the main reason for the decision.

*Flexible benefits will become increasingly popular among employers in 2004, with 9% of employers planning to introduce this type of scheme.

*Despite continuing cost pressures, employers are concerned with ensuring that their total rewards offering makes them an employer of choice, with more planning to introduce new and extended benefits than reduce them. It also reveals that family-friendly benefits will receive an overall boost in 2004, with 7% of employers planning to introduce them.

*Although 76% of employers carry out a regular appraisal of their reward policies, only 58% involve line managers in implementing the organisationís reward policies and practices, which suggests that implementation of these policies often leaves something to be desired..

The survey shows that the vast majority of employers (94%) are still contributing to the pensions arrangements of their staff despite the tough economic climate. However, it found that employers are restricting final salary schemes to existing staff, with just under half of them offering such plans to new hires. This trend is especially prevalent in the private sector, with many employers introducing money purchase schemes for new staff, typically with lower contribution rates.

Brown said: Pensions remain an key and often expected part of an attractive reward package which can enable them to recruit and retain staff in an increasingly tight labour market. Employer contribution rates are being reduced in an environment where we should be saving more for our retirement, and a new division is being created in many workforces according to when you joined the firm,